Paranoid parents at a school disco

TALKING about the present state of affairs in the mortgage market, one commentator hit the nail on the head this week. The fact of the matter, he said, was that while people still want to sell houses and plenty of people still want to buy, the companies supplying the funding just can't come to the party.

He had a point. There's little evidence that homeowners have stopped wanting to sell and move elsewhere, so the supply is plentiful. However, most potential buyers are frozen out, with lenders so risk averse that, with the odd exception, anyone without at least a 10 per cent deposit stands little chance of getting a mortgage. With the average house price in the Scotland now £158,360 (against £218,112 for the UK as a whole), that's a deposit of over £15,000 just to have a chance of a deal.

The Bank of England's recent £50 billion injection into the financial market helped to some extent, according to Nationwide, which cut some low loan-to-value rates this week. But with inflation back up to 3 per cent, the prospect of rate cuts next month – and probably for the summer – looks slim.

So potential sellers and buyers are like nervous kids waiting for the irn-bru to kick in at a bad school disco. They badly need lenders to join the party, but the only role they seem able to play right now is that of the paranoid parent at the door.

WITH personal insolvency figures continuing to rise, the onus is on financial institutions to make irresponsible lending a thing of the past. So Barclaycard demonstrated a ludicrous sense of timing in urging customers to take cash out on their credit cards. It sent letters to Barclaycard Platinum customers suggesting they use instant cash from their credit card to buy "a cup of coffee or your daily paper". What it "accidentally" omitted to mention was the eye-watering 27.9 per cent of interest that applies as soon as the cash leaves the ATM. Oh, and the 2.5 per cent charge for withdrawals.

Debt charities were quick to condemn Barclaycard, with Credit Action accusing it of being grossly irresponsible, while National Debtline pointed out that using a credit card to pay for everyday items is a sure indication of financial difficulty.Barclaycard has provided a timely demonstration of irresponsible lending.